Europe's debt crisis might have pushed its economy into a far steeper contraction than anyone thought and growth in China is sputtering, according to surveys that point to a sharp global slowdown taking place.
While there are fresh signs the US economy is perking up, business surveys today were mainly downbeat and confirmed the economic toll of the euro zone's sovereign debt crisis.
They come at the start of a week that could prove crucial in resolving a debt crisis which threatens to tear apart Europe's common currency area - something that would have catastrophic implications for the world economy.
The euro zone's composite purchasing managers index (PMI), while improving slightly month-on-month in November, still tallied with a 0.6% quarterly rate of decline for the last three months of this year. That would be worse than any forecast from more than 30 economists in a poll last month, which projected a mere 0.1% decline for the fourth quarter.
But there was a rare piece of good news from Britain, where its services PMI unexpectedly rose last month, suggesting the UK may avoid recession, although perhaps not stagnation.
While recession in the euro zone now looks a foregone conclusion, there are worrying signs the Chinese economy is starting to sag - perhaps unsurprising given the European Union is China's biggest export partner.
Chinese service sector growth cooled in November to its weakest pace in three months, further backing a view that authorities will have to fine-tune monetary policy again.
Markit's euro zone Composite PMI, which measures changes in business activity across the euro zone, rose slightly to 47 in November from October's 46.5, albeit still far below the 50 mark that divides growth from contraction.
"The major euro zone countries are all now contracting and face the risk of recession," said Chris Williamson, chief economist at survey compiler Markit.
The latest Reuters poll of economists showed a 60% chance the euro zone would fall into recession.
But Britain's services PMI was an unexpected bright spot, rising to 52.1 in November from 51.3 in October. Markit said it meant the UK economy looks unlikely to grow much, taking into account some dire manufacturing data last week.
Analysts expect the European Central Bank will cut interest rates on Thursday and throw more funding lifelines to stressed banks.
Further central bank policy easing also looks likely in China, where HSBC's services PMI fell to 52.5, a sharp decline given that October's reading was 54.1 - the highest in four months.
